System and method for using loyalty rewards as currency

ABSTRACT

The present invention involves spending loyalty points over a computerized network to facilitate a transaction. With this system, a loyalty program participant is able to use an existing transaction card to purchase an item over a computerized network, while at the same time offsetting the cost of that transaction by converting loyalty points to a currency value credit and having the credit applied to the participant&#39;s financial transaction account. Currency credit from converted loyalty points may also be applied to stored value cards, online digital wallet accounts and the like. Further, currency credit may also be applied to other accounts to effect a gift or donation.

CROSS-REFERENCE TO RELATED APPLICATIONS

This application is a continuation of, claims priority to and thebenefit of, U.S. Ser. No. 13/244,198 filed Sep. 23, 2011 and entitled“SYSTEM AND METHOD FOR USING LOYALTY REWARDS AS CURRENCY.” The '198application is a continuation of, and claims priority to and the benefitof U.S. Pat. No. 8,046,256 issued Oct. 25, 2011 (aka U.S. Ser. No.09/834,478 filed Apr. 13, 2001) and entitled “SYSTEM AND METHOD FORUSING LOYALTY REWARDS AS CURRENCY.” The '256 patent claims priority to,and the benefit of U.S. provisional applications: (1) Ser. No.60/197,296, filed Apr. 14, 2000, (2) Ser. No. 60/200,492, filed Apr. 28,2000, and (3) Ser. No. 60/201,114, filed May 2, 2000. All of which arehereby incorporated by reference.

FIELD OF INVENTION

This invention relates generally to a method and system for spendingloyalty points from a participant's loyalty account by converting theloyalty points to a currency credit and posting the credit to a secondaccount, where the second account is generally a financial transactionaccount, such as a charge card, that is used to facilitate atransaction.

BACKGROUND OF THE INVENTION

Traditional loyalty (e.g., incentive award, frequency reward, etc.)programs have been around for years. Loyalty programs are typically usedto help businesses develop and maintain participant loyalty and are usedas marketing tools to develop new clientele. A frequent flyer program isan example of a typical loyalty program, where the more the participantuses a particular airline or group of affiliated airlines the morefrequent flyer miles the participant earns. After accumulating frequentflyer miles, the participant may choose to redeem those miles forupgrades in service or free airline tickets. Various forms of theseprograms have developed over the years, ranging from programs such as“buy 9 get one 1” punch cards to more sophisticated credit card loyaltysystems, where participants are awarded points for using a particulartransaction card and/or by using a transaction card with particularmerchants or vendors. As competition in various markets increased,companies sought ways to expand loyalty programs to appeal to a broadercross-section of potential customers. One way this was accomplished wasby developing strategic partnerships and affiliations with otherbusiness sectors. For example, hotel chains, airlines and rental caragencies developed loyalty program partnerships and affiliations; creditand transaction card companies also joined in to promote a morecomprehensive and appealing loyalty program. These programs have beensuccessful, but again were limited in that the loyalty points could onlybe redeemed within the network of companies in the loyalty programaffiliation or partnership. For example, U.S. Pat. No. 5,937,391 ('391)owned by Fujitsu Limited; U.S. Pat. Nos. 5,774,870 ('870) and 6,009,412('412) owned by Netcentives, Inc.; and U.S. Pat. No. 5,025,372 ('372)owned by Meridian Enterprises (all of which are hereby incorporated byreference) illustrate recent efforts to create more attractive loyaltysystems.

The '391 patent is directed to an improved method of accumulating,managing, and redeeming points with a point-service system in an onlineshopping mall established through a network. This system utilizes pointaccumulation and points redemption ratios based on particular vendors inorder to vary the amount of points awarded and the value of pointsredeemed. This system is limited, however, to a participating network ofvendors that accept redemption of points for product, i.e., this systemis not compatible with merchants who do not accept points and are notintegrated into a shopping mall. This system is also directed tomanaging, within a network of participating vendors, the accumulation ofpoints from one vendor (with a particular accumulation ratio) andredemption of points with another vendor (with another redemptionratio).

The '870 and '412 patents both relate to an online, interactivefrequency and award redemption program which immediately awards andissues bonus points to a user's awards account in response to thatuser's online purchase of merchandise. In other words, submission of apurchase order form during an online session results in the calculationand addition of points to an enrolled user's account as well as thedisplay of current account information. The user is then immediatelypermitted to redeem any or all of the award points in the user'saccount, including currently awarded points, in that same onlinesession. This system is specifically directed to expediting the awardand redemption of points for product. Therefore, this invention islimited to redeeming points within a redemption network of merchants whoaccept points.

The '372 patent generally relates to an incentive award program whichallocates monetary amounts of credit based on a participant'sperformance of a designated level of achievement. The monetary amountscan be withheld and/or adjusted by a sponsoring company. Although thissystem allows for the crediting of a monetary value to a creditinstrument, it is limited in that the participant is not able tointeract over a computerized network with this system so as effect areal-time transaction or to effect a real time credit to a creditinstrument.

Although many of these programs have been successful in developingcustomer loyalty and incenting customers to act, they have presentedparticipants with limited opportunities to redeem loyalty points for theproducts of their choice or have provided participants with limitedaccessibility and control of their loyalty account. Therefore, a needexists in this industry for a program that expands product choice forloyalty program participants, while offering better real-time control ofone's account.

SUMMARY OF THE INVENTION

In general, the present invention overcomes the limitations and problemsof the prior art by providing a system and method for facilitatingvirtually any transaction over a computerized network using any type ofloyalty program. This system is not limited to merely exchanging loyaltypoints for product. In an exemplary embodiment of the present invention,a participant desiring to apply loyalty points to facilitate aparticular transaction over a computerized network such as the internet:(1) uses his or her charge card number to make an online purchase, (2)associates the charge card account with a loyalty account; and (3)invokes a process to apply a currency value credit (corresponding to adefined amount of loyalty points) to the participant's designated chargecard account. This currency value credit may offset all or part of acorresponding purchase. Therefore, loyalty points are not used to makethe purchase, but may be used to offset at least part of a correspondingcharge. The integration of the loyalty program and existing transaction(e.g., charge card) account processing systems is generally transparentto the merchant in that the merchant may be unaware that the customer isusing loyalty points by offsetting at least part of the charge with acorresponding credit. Additional embodiments relate to the crediting ofa variety of different accounts to facilitate particular transactions.

The present invention may or may not be integrated into a merchant orshopping network. The integrated embodiment of this invention (“theintegrated system”) provides for an explicit and known relationship orinterface between (1) a merchant or group of merchants (i.e., shoppingor redemption network or gateway) and (2) the account manager (theloyalty program host system). The non-integrated embodiment (“thestand-alone system”), allows the systems and methods of the presentinvention to function independently of the merchant network, where theparticipant may choose to redeem loyalty points for a currencyequivalent credit without regard to a particular merchant, a network ofmerchants or a corresponding transaction. For example, a participantpossessing a card provider A's (or account manager's) charge card andparticipating in an affiliated loyalty program, may use loyalty pointsto facilitate a transaction with any merchant that accepts card providerA's charge card.

An exemplary system and method of the present invention is generallydescribed herein, in terms of a transaction phase, a transactionauthorization and settlement phase, and an account reconciliation phase.During the transaction phase, a loyalty program participant desiring tospend accumulated loyalty points generally selects products or servicesfor purchase from an individual merchant or a shopping/redemptionnetwork of merchants. For example, in an online transaction, theparticipant may select a “pay with loyalty points” hyperlink button,thereby invoking a process to convert accumulated loyalty points to somecurrency value such as a credit to a participant's financial transactionaccount. After selecting a given product or service to purchase, theparticipant provides his or her transaction card number and thetransaction is processed as with any other transaction. Additionally, inone embodiment, before the transaction is allowed to go forward, theaccount manager verifies that sufficient credit is available onparticipant's financial transaction account and/or sufficient loyaltypoints are available in participant's loyalty account. In this case, acharge authorization system is accessed to compare the transactiondetails with account information stored in the participant's loyaltyaccount and the participant's transaction account.

During this verification process, the account manager's loyalty systemmiddleware determines the appropriate number of loyalty points to use byimplementing a conversion processor that converts the participant'sloyalty points to an appropriate currency equivalent (e.g., 100 loyaltypoints=$1 US). For example, taking into account the 100 to 1conversation ratio, if the transaction amount is $100.00, the loyaltypoint equivalent would be 10,000 points. If the participant confirms theuse of designated loyalty points to complete the purchase, theparticipant's loyalty account is reduced by the appropriate number ofloyalty points and the merchant proceeds with the transactionauthorization and settlement phase to complete the transaction.

Additional exemplary embodiments relating to the transaction phasecontemplate, inter alia, (1) use of a temporary account number(“secondary transaction number”) instead of a physical transaction cardnumber, (2) integration of a shopping or third party redemption network,(3) integration with external loyalty programs or commercial transactionnetworks, (4) redemption and conversion of loyalty points for giftproducts or charitable donations, (5) redemption and conversion ofpoints without a corresponding purchase, e.g., for cash or statementcredit, (6) transfer of loyalty points from one party to another, (7)transfer of loyalty points to different transaction instruments orconsolidating points onto a single transaction instrument.

Further, the transaction phase may occur over any computerized networkvia any suitable user interface system (e.g., internet, phone, wireless,POS terminal, etc.). As used herein, the term “computerized network”includes, but is not limited to any network implemented in the form of awire-based network (including telephone and cable lines), or as awireless network (including satellite or cellular networks). It shouldbe noted that the conversion ratio may vary from merchant to merchantaccording to the merchant's affiliation, if any, with the loyaltyprogram or account manager. Through the loyalty system middlewareconversion application, the account manager may adjust conversion ratiosto take into account various promotional or incentive marketing programsin order to better serve the needs of its participants or affiliatedmerchants. By further example, if the account manager desired to run apromotional program with a valued merchant, the conversion ratio forusing loyalty points at the valued merchant (10 loyalty points=$1 US)may be twice the amount for that of an ordinary merchant (20 loyaltypoints=$1 US).

As with traditional purchases using transaction cards, the transactioncard details (e.g., transaction card number, expiration date, etc) areprovided to the merchant or shopping network system to complete thetransaction. The merchant then processes this transaction card number(and associated transaction details) for authorization and settlement asis generally done with routine transaction card purchases. Thetransaction authorization and settlement phase supports the processes ofsubmitting a transaction record to the account manager (e.g., cardprovider or acquirer) for payment. A financial capture system capturesthe financial information and transaction details and sends thisinformation to an accounts payable system to pay the merchant and to anaccounts receivable system to update the participant's transaction cardaccount record to reflect the transaction event and applicable charge.

During the account reconciliation phase, the accounts receivable systemreconciles the charge for the particular transaction with a credit fromthe participant's loyalty account. In one embodiment, for each chargewhere the participant selected to pay with loyalty points, there will bea corresponding and offsetting charge to the account. In anotherembodiment, where the account participant desires to pay only part ofthe transaction amount with loyalty points, the loyalty credit will onlypartially offset the merchant charge and the remainder will be paid withthe participant's transaction card. In a third embodiment, there may bea credit from a participant's loyalty account without a correspondingtransaction charge, such as is the case with a gift certificateembodiment, where the points are converted to a currency credit andissued in the form of a gift certificate; or stored on or downloaded toa stored value card or smart card.

BRIEF DESCRIPTION OF THE DRAWINGS

A more complete understanding of the present invention may be derived byreferring to the detailed description and claims when considered inconnection with the Figures, wherein like reference numbers refer tosimilar elements throughout the Figures, and:

FIG. 1 illustrates exemplary components of the present invention;

FIG. 2 illustrates an exemplary schematic overview of the various phasesof the present invention;

FIGS. 3-9 are web page screen shots depicting an exemplary onlineembodiment of the present invention;

FIGS. 10-11 illustrate exemplary participant account statementsreflecting merchant charges and offsetting loyalty credits;

FIG. 12A is a flow diagram illustrating an exemplary online embodimentintegrating a shopping network with the account manager's website.

FIGS. 12B-D are exemplary web page screen shots further illustrating theonline flow diagram shown in FIG. 12A.

FIG. 13 illustrates an exemplary embodiment utilizing a secondarytransaction number instead of a physical transaction card number.

FIG. 14 illustrates a second exemplary embodiment utilizing a secondarytransaction number instead of a physical transaction card number.

DETAILED DESCRIPTION OF EXEMPLARY EMBODIMENTS OF THE INVENTION

In general, the present invention uniquely integrates a loyalty programand the financial transaction systems of a transaction card provider(“account manager”) to more effectively use loyalty points to facilitatetransactions. Specifically, the system and methods described herein,allow an individual to convert loyalty points (such as points awarded toa participant in the American Express Membership Rewards® Program) tocurrency (e.g., US, dollar credit or some cash value equivalent) inorder to facilitate a purchase or other transaction. This system notonly provides a mechanism for converting loyalty points to a currencycredit to purchase merchandise, but it also comprises existing accountmanager settlement systems such as accounts receivable and accountspayable processes to facilitate transaction processing.

FIG. 1 illustrates exemplary components of the present invention. Tofacilitate a transaction using loyalty points, a participant 1 engages amerchant 5 to purchase a product or service using currency creditgenerated by conversion of loyalty points. The merchant 5 need not beaffiliated or partnered with any loyalty program, shopping network, orthird party redemption system, although this arrangement is contemplatedby an exemplary embodiment of this invention, as shown in FIG. 1(shopping gateway or redemption network 100). Further, unliketraditional loyalty programs, the merchant 5 may not even be aware thatthe participant 1 is using loyalty points to facilitate the transactionbecause the merchant 5 processes the transaction using a participant'sfinancial transaction account information just as with any othertransaction where a transaction card number is used for payment. Theaccount manager 10 handles the processes to convert the loyalty pointsto a currency-equivalent and to then credit the participant's financialtransaction account with an amount that may offset a charge associatedwith a particular transaction. As depicted in FIG. 1, an exemplarysystem of the present invention may comprise various subsystems andapplications, some of which are part of the loyalty program, some ofwhich are part of the financial transaction account system, and some ofwhich are used to facilitate interaction between the two systems. Theexemplary systems are, inter alia, a User Interface System 20, a loyaltysystem middleware 40, a loyalty program 30, a card authorization system(CAS) 50, a financial capture system (FINCAP) 60, accounts payable (AP)70 and accounts receivable (AR) 80 systems. The exemplary components andparticipants of the present invention are described below in moredetail.

The participant 1, as used throughout this application, should beunderstood to mean any individual, business or other entity that desiresto use any non-currency tender such as loyalty points to facilitate atransaction. The participant 1 may also be known as and occasionallyreferred to herein as a “customer,” “cardholder,” “user,” “cardmember,”or the like. In an exemplary embodiment, although the participant 1 maybe an existing credit card holder, this is not required. Although theparticipant 1 will generally be enrolled in a loyalty program, such asthe American Express Membership Rewards® Program, and will haveaccumulated loyalty points, this is also not required.

Although the non-currency tender referred to throughout this disclosureis frequently referred to as “loyalty points,” this invention is not solimited. It should be understood the loyalty points includes any type ofnon-currency tender, such as coupons, frequent flyer miles, incentiveawards, frequency awards, and the like. One example of loyalty pointscontemplated by this invention is the membership reward points awardedto participants in the American Express Membership Rewards® program.

The “merchant 5” is any individual, business or other entity whotransacts with the participant 1, whether or not in exchange for goodsor services. For example, in one embodiment, a merchant 5 may be anonline bookstore such as Amazon.com®. In another embodiment, a merchant5 may be a local hardware store utilizing a point of sale system. Inother situations, the merchant 5 and the participant 1 may be the same.In other situations, the merchant 5 may be the same as the accountmanager 10. Although certain embodiments contemplate the merchant 5being affiliated or partnered with a shopping network, as shown at 100in FIG. 1, this is not required. Although referred to herein as“merchant,” this term contemplates situations where any second partyreceives a form of currency from a first party, such as, for example,where a participant 1 gas a product (e.g., gift certificate) containinga currency credit to another individual. For example, a participant 1may desire to convert loyalty points to a currency-equivalent value togenerate a gift certificate for use at a particular merchant 5.

The term “transaction” not only contemplates an exchange of goods orservices for value from one party to another, but also the gifting ofsomething of value from one party to another. This may be, for example,gifting of a merchant gift certificate as described above or gifting ofloyalty currency from a first party account to another account.Additionally, transaction or transaction card numbers are accountnumbers that are used to facilitate any type of transaction. As usedherein, a “transaction card” may include any account used for financialand/or loyalty transactions wherein the account may or may not beassociated with a physical card, such as a charge card, credit card,debit card, smart card, bar-coded card, magnetic stripe card, accountnumber, internet account, internet card, personal digital assistantaccount, digital wallet account, airline card, mall card, frequentshopper card, and/or the like.

The account manager 10 as defined herein includes any individual,business, or other entity; or group or affiliation of individuals,businesses or other entities, that facilitates the processes of thepresent invention. The account manager 40 may also be known as andoccasionally referred to herein as “card provider,” “card issuer,” orthe like. It should be appreciated that although FIG. 1 depicts theloyalty program 30, loyalty system middleware 40, CAS 50, FINCAP 60, AR70, AR 80. User Interface 20 as contained within one account managersystem, it should be appreciated that the account manager 10 maycomprise many sub-components, subsystems and/or a variety of businessentities. While a closed-loop network as utilized by American Express®may contain many, if not all of the subsystems in FIG. 1, an opennetwork system, such as VISA® and Mastercard®, may utilize variousacquirer and issuer networks and components that make up the varioussystems in FIG. 1. One skilled in the art will appreciate that thesesystems may be one system, distributed systems or any other arrangementof systems in any form, such as software, hardware, etc. In short, thevarious subsystems described herein may be contained within one accountmanager 10 system or within the systems of many account managers 10.

Communication among the account participant 1, merchant 5, the accountmanager 10 or additional third parties (as may be contemplated byvarious embodiments) may take place over any computerized network viaany suitable user interface system 20 that allow for the exchange ofanalog or digital information. As such, these systems may include, butare not limited to, telephone interactive voice response oroperator-facilitated systems, online or offline computer networkedsystems using various transfer protocols, wireless devices, personaldata assistants, interactive TV, broadband, ultrawide band devices,transponders and the like. For example, the user interface system maycomprise web servers and applications configured to facilitateclient/server communication over the internet via any wireless orwire-based system.

The loyalty program 30 may be any computer system for managing,tracking, and/or reporting loyalty program information. As previouslydescribed, the traditional loyalty systems allow participants toaccumulate points in a loyalty program account and to then redeem pointsfor merchandise. For example, the American Express Membership Rewards®system allows participants to accumulate points by using theirtransaction card (American Express® card) to make purchases or byshopping with affiliated merchants. The loyalty program 30, ascontemplated by the present invention, may be a stand-alone system ormay be affiliated or integrated with other loyalty programs ortransaction networks. The component parts of an exemplary loyaltyprogram 30 generally include computer server and database systems forprocessing and storing loyalty program account information. As depictedin FIG. 1, the loyalty program system may exist within the accountmanager's systems. Alternatively, the loyalty program system may be aseparate loyalty program managed by a third party.

The loyalty system middleware 40 is a processing system that isgenerally configured to facilitate communication between the loyaltyprogram 30, existing transaction card processing systems, and/orshopping/redemption networks. Specifically, the loyalty systemmiddleware 40 is configured to, inter alia, (1) receive requests to useloyalty points as currency, via a user interface system 20, (2) verifywith the loyalty program 30 that sufficient loyalty points areavailable, (3) communicate with an authorization system (e.g., CAS 50)to determine if the participant's 1 financial transaction account isactive and has a sufficient credit limit, (4) convert loyalty points tocurrency, and (5) interact with financial capture (e.g., FINCAP 60) oraccounts receivable (AR) 80 systems in order to credit a participant'sfinancial transaction account with the appropriate amount of loyaltycurrency. The loyalty system middleware 40 may comprise various computerweb and application, servers, databases, routers, relays and the like inorder to suitably process, route, and transmit data among, inter alia,the user interface system 20, loyalty program 30, FINCAP 60, and CAS 50.

The charge authorization system (CAS) 50, the financial capture system(FINCAP) 60, the accounts payable system (AP) 70 and the accountsreceivable system (AR) 80 are known in the art systems employed bytransaction card companies like American Express® and other cardacquirers or card issuers to authorize merchant transaction requests andprocess settlement requests. While FIG. 1 shows these systems in oneaccount manager system, it should be appreciated that these systems takevarious forms depending on the particular account manager or groups ofaccount managers. For example, an exemplary CAS 50 receives anauthorization request from a merchant 5 to determine if the financialtransaction account associated with a transaction card number is validand has sufficient credit. CAS 50 includes systems for comparing thetransaction details (e.g., account number, monetary amount oftransaction, expiration date, etc) with the participant's financialtransaction account information to determine if the financialtransaction account is active and if a sufficient credit limit exists tocomplete a transaction. If these conditions are satisfied, CAS 50returns to the merchant 5 an approval code reflecting that the merchant5 is authorized to complete the transaction. The loyalty systemmiddleware 40 or loyalty program 30 may also either reference this sameCAS 50 as shown in FIG. 1 to determine if the participant's loyaltyaccount information is valid (and with sufficient loyalty points) or mayinvoke a separate CAS component (not shown) to complete the same task.

In an exemplary embodiment, upon completion of a transaction (or aseries of transactions), the merchant 5 transmits a record of charges(ROC) and summary of charges (SOC) request to the card provider(referred to herein as the “account manager 10”) requesting to be paidfor the transaction. The ROC file generally contains transaction detailswhich could include, inter alia, the merchant identification number,amount of purchase, date of purchase, and expiration date. Thisinformation is captured in the account manager's (e.g., charge cardprovider) financial capture system (FINCAP) 60 where it is processed formerchant 5 payment and cardholder (participant 1) billing. FINCAP 60then sends a payment file to an AP 70 to pay the merchant 5, retrievesthe appropriate participant 1 (e.g., cardholder) account information,and sends a billing file to an AR 80. The AR 80 generates a participant1 billing statement that reflects the appropriate billing informationsuch as date of charge, amount of charge, merchant, etc. As will bedescribed in detail later, this invention contemplates the AR 80receiving a credit from the loyalty system middleware 40 toappropriately offset at least a part of the merchant 5 transactioncharge. Alternatively, as shown in FIG. 1, the loyalty system middlewaremay send credit requests to the FINCAP 60 for processing and forwardingto the AR 80.

Having described and defined exemplary components of this invention, itshould be appreciated that the transaction system of the presentinvention may be described herein in terms of functional blockcomponents, flow charts, screen shots, optional selections and variousprocessing steps. It should be appreciated that such functional blocksmay be realized by any number of hardware and/or software componentsconfigured to perform the specified functions. For example, the presentinvention may employ various integrated circuit components, e.g., memoryelements, processing elements, logic elements, look-up tables, and thelike, which may carry out a variety of functions under the control ofone or more microprocessors or other control devices. Similarly, thesoftware elements of the present invention may be implemented with anyprogramming or scripting language such as C, C++, Java, COBOL,assembler, PERL, or the like, with the various algorithms beingimplemented with any combination of data structures, objects, processes,routines or other programming elements. Further, it should be noted thatthe present invention may employ any number of conventional techniquesfor data transmission, signaling, data processing, network control, andthe like. For a basic introduction of cryptography, please review a textwritten by Bruce Schneider which is entitled “Applied Cryptography:Protocols, Algorithms, And Source Code In C,” published by John WileySons (second edition, 1996), which is hereby incorporated by reference.

It should be appreciated that the particular implementations shown anddescribed herein are illustrative of the invention and its best mode andare not intended to otherwise limit the scope of the present inventionin any way. Indeed, for the sake of brevity, conventional datanetworking, application development and other functional aspects of thesystems (and components of the individual operating components of thesystems) may not be described in detail herein. Furthermore, theconnecting lines shown in the various figures contained herein areintended to represent exemplary functional relationships and/or physicalcouplings between the various elements. It should be noted that manyalternative or additional functional relationships or physicalconnections may be present in a practical electronic transaction system.

It will be appreciated, that many applications of the present inventioncould be formulated. One skilled in the art will appreciate that anetwork may include any system for exchanging data or transactingbusiness, such as the Internet, an intranet, an extranet, WAN, LAN,satellite or wireless communications, and/or the like. The participant 1may interact with the account manager's 10 (e.g., charge card provider)transaction system or a merchant 5 via any input device such as atelephone, keyboard, mouse, kiosk, personal digital assistant, touchscreen, voice recognition device, transponder, biometrics device,handheld computer, personal data assistant (e.g., Palm Pilot®), cellularphone, web TV, web phone, blue tooth/beaming device and/or the like.Similarly, the invention could be used in conjunction with any type ofpersonal computer, network computer, workstation, minicomputer,mainframe, or the like running any operating system such as any versionof Windows, Windows NT, Windows2000, Windows 98, Windows 95, MacOS,OS/2, BeOS, Linux, UNIX, or the like. Moreover, although the inventionuses protocols such as TCP/IP to facilitate network communications, itwill be readily understood that the invention could also be implementedusing IPX, Appletalk, IP-6, NetBIOS, OSI or any number of existing orfuture protocols. Moreover, the system contemplates the use, sale,exchange, transfer, or any other distribution of any goods, services orinformation over any network having similar functionality describedherein.

As will be appreciated by one of ordinary skill in the art, the presentinvention may be embodied as a method, a data processing system, adevice for data processing, and/or a computer program product.Accordingly, the present invention may take the form of an entirelysoftware embodiment, an entirely hardware embodiment, or an embodimentcombining aspects of both software and hardware. Furthermore, thepresent invention may take the form of a computer program product on acomputer-readable storage medium having computer-readable program codemeans embodied in the storage medium. Any suitable computer-readablestorage medium may be utilized, including hard disks, CD-ROM, opticalstorage devices, magnetic storage devices, flash card memory and/or thelike.

Communication between the parties (e.g., participant 1, account manager10, and/or merchant 5) to the transaction and the system of the presentinvention may be accomplished through any suitable communication means,such as, for example, a telephone network, Intranet, Internet, point ofinteraction device (point of sale device, personal digital assistant,cellular phone, kiosk, etc.), online communications, off-linecommunications, wireless communications, and/or the like. One skilled inthe art will also appreciate that, for security reasons, any databases,systems, or components of the present invention may consist of anycombination of databases or components at a single location or atmultiple locations, wherein each database or system includes any ofvarious suitable security features, such as firewalls, access codes,encryption, de-encryption, compression, decompression, and/or the like.

The present invention is described below with reference to blockdiagrams and flowchart illustrations of methods, apparatus (e.g.,systems), and/or computer program products according to various aspectsof the invention. It will be understood that each functional block ofthe block diagrams and the flowchart illustrations, and combinations offunctional blocks in the block diagrams and flowchart illustrations,respectively, can be implemented by computer program instructions. Thesecomputer program instructions may be loaded onto a general purposecomputer, special purpose computer, or other programmable dataprocessing apparatus to produce a machine, such that the instructionswhich execute on the computer or other programmable data processingapparatus create means for implementing the functions specified in theflowchart block or blocks.

These computer program instructions may also be stored in acomputer-readable memory that can direct a computer or otherprogrammable data processing apparatus to function in a particularmanner, such that the instructions stored in the computer-readablememory produce an article of manufacture including instruction meanswhich implement the function specified in the flowchart block or blocks.The computer program instructions may also be loaded onto a computer orother programmable data processing apparatus to cause a series ofoperational steps to be performed on the computer or other programmableapparatus to produce as computer-implemented process such that theinstructions which execute on the computer or other programmableapparatus provide steps for implementing the functions specified in theflowchart block or blocks.

Accordingly, functional blocks of the block diagrams and flowchartillustrations support combinations of means for performing the specifiedfunctions, combinations of steps for performing the specified functions,and program instruction means for performing the specified functions. Itwill also be understood that each functional block of the block diagramsand flowchart illustrations, and combinations of functional blocks inthe block diagrams and flowchart illustrations, can be implemented byeither special purpose hardware-based computer systems which perform thespecified functions or steps, or suitable combinations of specialpurpose hardware and computer instructions.

This system may be integrated with other systems to better facilitatethe spending of loyalty points and the conversion of loyalty points to acurrency credit. For more information on loyalty systems, smart cardsystems, transaction systems, electronic commerce systems and digitalwallet systems, see, for example, the Shop AMEX™ system as disclosed inSer. No. 60/230,190 filed Sep. 5, 2000; a digital wallet systemdisclosed in U.S. Ser. No, 09/652,899 filed Aug. 31, 2000; a storedvalue card as disclosed in Ser. No. 09/241,188 filed on Feb. 1, 1999; asystem for facilitating transactions using secondary transaction numbersdisclosed in Ser. No. 09/800,461 filed on Mar. 7, 2001, and smart cardsystems disclosed in Ser. No. 60/232,040, filed on Sep. 12, 2000, andU.S. Pat. Nos. 5,742,845; 5,898,838 and 5,905,908, owned by Datascape,all of which are herein incorporated by reference.

Referencing the online aspect of an exemplary embodiment of thisinvention, each participant is equipped with a computing system tofacilitate online commerce transactions. The computing units may beconnected with each other via a data communication network. The networkis a public network and assumed to be insecure and open toeavesdroppers. In the illustrated implementation, the network isembodied as the internet. In this context, the computers may or may notbe connected to the internet at all times. For instance, theparticipant's computer may employ a modem to occasionally connect to theinternet, whereas the account manager's computing center might maintaina permanent connection to the internet. It is noted that the network maybe implemented as other types of networks, such as an interactivetelevision (ITV) network.

The merchant 5 computer and the account manager 10 computer may beinterconnected via a second network, referred to as a payment network.The payment network represents existing proprietary networks thatpresently accommodate transactions for credit cards, debit cards, andother types of financial/banking cards. The payment network is a closednetwork that is assumed to be secure from eavesdroppers. Examples of thepayment network include the American Express®, VisaNet® and theVeriphone® network. While an exemplary embodiment of the invention isdescribed in association with a transaction system, the inventioncontemplates any type of networks or transaction systems, including, forexample, unsecure networks, public networks, wireless networks, closednetworks, open networks, intranets, extranets, and/or the like.

Turning now to the methods for spending loyalty points by converting toa currency value credit, FIG. 2 illustrates three exemplary phases: (1)a transaction phase (step 200), (2) a transaction authorization andsettlement phase (step 300), and (3) an account reconciliation phase(step 400).

Transaction Phase:

The transaction phase includes a participant's successful registrationand enrollment to use the system and method of the present invention. Ingeneral, although not required, a participant 1 will have registered toparticipate in a loyalty program and will have accumulated at least someloyalty points. However, conducting the transaction before acquiringloyalty points is also contemplated by the invention. In an exemplaryembodiment, the participant 1 has a transaction card associated with afinancial transaction account (e.g., Discover® card, American Expresscard, etc.), wherein the card provider or loyalty program manager iswhat is referred to herein as the account manager 10. In an exemplarysystem, the account manager is both a card provider and a loyaltyprogram manager. Registration and enrollment processes are known in theart, and as such, will not be discussed in-depth herein. Although anexemplary embodiment contemplates the use of, and integration of aparticipant's loyalty account and financial transaction account, otherembodiments (e.g., the secondary transaction number embodiment, storedvalue card, gift certificate, etc (discussed later)) do not necessarilyrequire this integration.

The transaction phase may be facilitated using an integrated (i.e.,integrated with a shopping network) or stand-alone (i.e., not integratedwith a shopping network) system. A stand-alone exemplary onlineembodiment is depicted in FIGS. 3-9. With additional reference to FIG.1, these screen shots illustrate an exemplary embodiment of the presentinvention utilizing a user interface system 20 suitably configured withan appropriate web server system to facilitate online transactions, FIG.3 shows a typical online merchant web page. Here, a participant 1selects an item to purchase (e.g., a snowboard) from a merchant's onlineweb page and selects the payment button. Desiring to use loyalty points,the participant 1 links to the account manager 10 website and logs-inwith appropriate authenticating information such as a username andpassword (FIG. 4). As discussed later, in an alternative embodiment (the“integrated system”), the participant 1 may access a catalog of productsand services offered by merchants by suitably linking to a websitehosted on a redemption network, a shopping network or other system ofaffiliated merchants that may be situated within or without the accountmanager's website domain (see FIG. 12A-D depicting the integration of ashopping network within the account manager's system, wherein theaccount manager facilitates some or all of the transaction processing).

Continuing with FIG. 5, the account manager 10 website returns a welcomescreen to the participant 1 (Joseph E. Example) reflecting participant's1 loyalty account information, e.g., total points available. Theparticipant 1 is presented with options, for example, to review theloyalty account history 41, to pay with loyalty points 43, to return tohome page 42, etc. The participant 1 selects “pay with loyalty points”to initiate the process to convert loyalty points to the appropriateamount of currency to facilitate the transaction. As shown in FIG. 6,the loyalty program prompts the participant 1 to key in appropriatetransaction account and transaction information, e.g., merchant 51,transaction card type 52, number 53, expiration date 54, amount ofpurchase 55. The merchant 51 field (or similar fields) may also includeoptions for generating a gift certificate, charitable donations, etc.Further, software downloaded to a participant's remote computer may alsoprovide digital wallet features that automatically fills-in payment andtransaction field information.

Upon selecting the “continue” 56 option, referring again to FIG. 1, theloyalty system middleware 40 is generally configured to interface withCAS 50, which can be any form of an account authorization system ornetwork, to validate the transaction request (i.e., to determine if thetransaction card number is valid and if sufficient credit is availablein the financial transaction account). If the transaction card is validand sufficient credit is available, the loyalty system middleware 40interfaces with the loyalty program 30 to calculate the appropriatenumber of loyalty points necessary to pay for the transaction (e.g.,10,000 points=$250) and to determine if sufficient loyalty points areavailable in the participant's loyalty program account. The participant1 is presented with a confirmation screen (FIG. 7) confirming that theparticipant's 1 transaction account (e.g., acct. no. 0000 001111 11111)will be credited with the appropriate transaction amount (e.g., $250),while the participant's loyalty account will be reduced by theappropriate amount (e.g., 10,000 points). Although one embodimentcontemplates updating the participant's loyalty account after thetransaction has cleared, this updating can be done at any point in theprocess. Moreover, any portion of the process may utilize real-time orbatch processing.

The conversion processor that preferably resides within the loyaltysystem middleware 40, may be programmed to take into account a pluralityof factors to determine the appropriate conversion ratio of loyaltypoints to currency value. Accordingly, loyalty points accumulated bypurchases involving a particular vendor may be converted at a higherratio when the points are redeemed with the same vendor. Similarly, whenpurchasing with loyalty currency at an account manager's 10 valued oraffiliated merchant, the account manager 10 may desire to provide theparticipant 1 with a higher conversion ratio to incent particularbehavior. As one skilled in incentive marketing and loyalty systems willappreciate, there may be a multitude of variables that an accountmanager 10 and/or affiliated merchant 5 will want to consider informulating appropriate conversion ratios, including different ratiosfor holidays, seasons, different times of days, based on remaininginventory of products, based on participant status, based on method offacilitating transaction (e.g., online vs. POS), and/or the like.

In an exemplary embodiment, after the conversion ratio and amount ofloyalty points are presented to the participant 1, the participant 1 isprovided the option to cancel 61 the “pay with loyalty points” requestor approve the request 62. If the “pay with loyalty points” is selected,the participant 1 inputs the requisite payment information into themerchant 5 payment fields. FIG. 8 depicts a typical online merchantpayment page where the participant is prompted for transaction accountinformation to complete a purchase. FIG. 9 depicts an online merchant'sconfirmation page indicating that the transaction amount will be chargedto the designated transaction card account (e.g., 0000 001111 11111).One skilled in the art will appreciate that any of the steps herein maybe preselected by either party to provide automatic approval of certainsteps or re-populate certain fields with repeated use information.

Additional online user interface embodiments for facilitatingtransactions provide for:

(1) the integration of the merchant 5 website with the account manager10 website to provide a seamless environment and “look and feel” betweenthe merchant's payment web page and the account manager's “pay withloyalty points” web page.

(2) the use of an online digital wallet, as described in U.S. Ser. No.09/652,899 filed on Aug. 31, 2000 (incorporated herein by reference),where participant 1 account information is stored online and isintegrable with the account manager 10 features and the onlinemerchant's 5 payment features. In this embodiment an online wallet maybe periodically loaded with loyalty points converted to a currencycredit. The online wallet may or may not be associated with aparticipant's financial transaction account.

(3) the implementation of an activator feature that recognizes merchantpayment websites during the course of a participant's online session(via an activator software program) and automatically generates a pop-up“pay with loyalty points” button (or window) asking the participant ifhe desires to pay with loyalty points. This activator program may bedownloaded from the account manager's website and may be configured tolink the participant to the account manager's website.

(4) using a wireless-enabled personal digital assistant (PDA), a browserenabled wireless telephone or other portable data device, a participant1 may desire to convert loyalty points to a currency credit when makinga purchase at a physical merchant 5 location instead of at a merchant'sonline website. With this system, using a suitably enabled PDA device, aparticipant 1 is able to scan SKU numbers of products, send these SKUnumbers to the account manager 10, whereupon the account manager 10identifies the manufacturer (or merchant) and may employ a suitableconversion ratio depending on the status of the merchant. For example,when shopping at a grocery market, a participant may scan all food itemswith a PDA device, this information is then transmitted wirelessly tothe account manger 10, whereupon a conversion processor is invoked andapplies a suitable conversion ratio depending on the particularmanufacturer involved,

Transaction Authorization and Settlement Phase:

In an exemplary embodiment, the transaction authorization and settlementphase of the present invention is generally the same as traditionalfinancial settlement systems and is well-known in the bank andtransaction card industry. As such, the present invention contemplatesminimal adjustments to existing commercial transaction card processingsystems.

In general, after receiving transaction card information from aparticipant 1 to complete a purchase, the merchant 5 submits theinformation to an authorization network that typically includes atransaction card issuer's charge authorization system such as CAS 50(FIG. 1). The CAS 50 verifies that the participant's transaction card isvalid and the financial transaction account has sufficient credit. Ifthe card number is authorized, the CAS 50 provides a merchant with anapproval code. An alternate embodiment of this invention contemplatesCAS 50 interacting with the loyalty system middleware 40 or directlywith the loyalty program 30 to recognize that a loyalty currency creditis associated with the transaction details (e.g., transaction cardnumber and purchase) and to verify that the loyalty account is valid andpossesses sufficient credit.

Upon completing a transaction with participant 1, a record of charges(ROC) is generally created. Generally, after a given period of time(e.g., at the end of the day), the merchant 5 summarizes thetransactions for that period in a summary of charges (SOC) and submitsthe ROCs and SOC to the transaction card provider or a card acquiringnetwork (collectively referred to herein as the “account manager 10”)for payment. A financial capture system (FINCAP) 60 receives thetransaction details (ROCs/SOC) and processes the information formerchant 5 payment and participant 1 billing.

Account Reconciliation Phase:

As previously explained, the transaction details are forwarded to FINCAP60 were a billing record is generated and sent to an accounts receivable(AR) system 80 to update the participant's 1 transaction card accountand generate a billing statement. In one embodiment, the loyalty systemmiddleware 40 forwards the appropriate credit to the FINCAP 60 or AR 80systems to generate a credit to the participant's account, FIG. 10reflects an exemplary billing statement excerpt reflecting the merchantcharge (e.g., $250) and the corresponding loyalty program credit (e.g.,$250). As previously mentioned, another embodiment allows theparticipant 1 to pay only part of the transaction amount with loyaltycredit, in this instance, as depicted in FIG. 11, the participant 1statement reflects that the charge is only partially offset and theparticipant 1 is billed for the remaining amount.

Upon completion of the account reconciliation (or at any point in thetransaction event), the loyalty system middleware 40 interacts with theloyalty program 30 to permanently update the participant's loyaltyaccount.

In an exemplary embodiment, the loyalty currency credit, the transactiondetails and the transaction card account may be associated within atransaction log database, a participant financial transaction accountdatabase, and/or a participant loyalty account database. Thisassociation between the transaction details, the participant transactioncard account and the participant loyalty account facilitate customerservice features that are common with transaction card use (e.g., aparticipant charge-back request and merchandise return, etc.), but havebeen previously unavailable to those redeeming loyalty points forproduct. For example, when a participant 1 desires to return a product(that has been purchased using loyalty points) to a merchant 5, themerchant 5 processes the return the same as with any other transactioncard purchase, wherein the merchant 5 posts a credit to theparticipant's transaction card account. Alternatively, if desired, theFINCAP 60, upon accessing the transaction details, may recognize thetransaction as involving a loyalty currency credit and may invoke theloyalty system middleware 40 to perform the appropriate conversion fromcurrency credit back to loyalty points, and to adjust the participant'sloyalty account accordingly. Similarly, during a dispute handlingprocess where the participant 1 requests a charge-back to the merchant5, the account manager's 10 customer service agent is able to retrievedata based on (1) transaction details, (2) transaction accountinformation, or (3) loyalty account details. Accordingly, if acharge-back does occur, the loyalty system middleware 40 may be invokedto either credit the transaction account or adjust the amount of loyaltypoints in the loyalty account.

FIGS. 12A-D illustrate an online embodiment of the present inventionutilizing a shopping gateway 100 (see also FIG. 1) that provides acomprehensive range of shopping functionality including connectingparticipants 1 with online merchants (via a gateway 100) and providingintegrated search capabilities. This embodiment contemplates a networkof merchants, affiliated with the account manager 10, that may besearched for a variety of products from within the account manager's 10website (or alternatively on a co-branded or third-party website). Uponsearching this comprehensive catalog of merchandise, and successfullyretrieving a desired list of products to choose from, the serverapplications are suitably configured to present to the participant 1,inter alia, a list of the retrieved products, the associated merchant 5,and the cost in (i) currency (e.g., $249.98) and (ii) non-currencyloyalty points (e.g., 49,998 points) (FIG. 12A, step 101; see also FIG.12B, reference numbers 116-118). After choosing the “pay with points”button 115 (FIG. 12B), the web page shown in FIG° 12C is presented tothe participant 1 (step 102) requesting the participant to enter name121, card number 122, expiration date 123, four digit card control IP(CID) number 124, and billing zip code 125. As appreciated by oneskilled in this art, a variety of fields may be configured depending onthe type of transaction system used. As previously noted, to calculatethe loyalty point value, the web server is configured to suitably engagethe loyalty system middleware 40 (step 103), which in turn may accessthe CAS 50 (step 104), AR System 80 (step 105, and the Loyalty Program30 (step 106) in order to verify that sufficient loyalty points andfinancial transaction account credit are available, and to calculate thenumber of loyalty points needed to complete the transaction. As shown inFIG. 12A, the loyalty program 30 (or alternatively the loyalty programmiddleware 40) converts the appropriate amount of loyalty points to acurrency value and issues an appropriate credit to FINCACP 60 to beapplied to the participant's financial transaction account (step 107).The merchant-specific website (FIG. 121)) is retrieved and theparticipant completes the transaction (step 108). The merchant 5processes the transaction as with any other transaction card transaction(step 109) sending the transaction details first to CAS 50 to obtain anapproval code and then compiling the ROCs/SOC for hatch processtransmission to the FINCAP 60 for payment. At FINCAP 60, the paymentrequest is sent to an accounts payable system and the charge amount(e.g., $249.99) and loyalty credit (e.g., Express Shopper credit of$249.99) are sent to the AR system 80 for posting to the participant'sbilling statement (step 110).

FIGS. 13 and 14 depict an embodiment of the present invention utilizinga secondary transaction numbers (“STN”) instead of the participant'sactual transaction card number. In general, a participant 1 seeking topurchase products from a merchant 5 may choose to use a temporary,limited use number in place of the participant's actual transactioncard. This transaction may be more secure because the participant'sactual transaction card number is not released to any third party. Here,a participant 1 may desire to obtain from the account manager 10 alimited or temporary use transaction number (STN) that functions as astandard transaction card (e.g., credit card) number but may be limitedby the participant 1 to any number of defined conditions-of-use (e.g.,limited number of transactions, limited dollar amount, specifiedmerchant, etc.) limitations. For example, the secondary transactionnumber may be associated with, inter alia, a participant's actualtransaction card account and/or a participant's loyalty account. Thelatter embodiment would allow a loyalty account participant to purchaseusing loyalty points as a currency value even without having an actualtransaction card account. In other words, the secondary transactionnumber could function as a temporary transaction card account for useonly in spending loyalty points. The secondary transaction number,however, in an exemplary embodiment, conforms to existing transactioncard standards so that it may be processed with the bankingauthorization and settlement systems. For additional information onusing secondary transaction numbers, see U.S. patent application, Systemfor Facilitating a Transaction, Brea et al, filed on Mar. 7, 2000, andrelated provisional applications disclosed in Ser. No. 60/187,620 filedMar. 7, 2000, Ser. No, 60/200,625 filed Apr. 28, 2000 and Ser. No.60/213,323 filed May 22, 2000.

FIG. 13 shows one embodiment using a secondary transaction number tofacilitate a transaction using loyalty points. As depicted in FIG. 13, aparticipant 1 accesses and logs onto the account manager's 10 servicesvia a user interface system 20 (e.g., an Internet connection) (step251). The participant 1 proceeds (clicks on hyperlink) to the loyaltysystem middleware 40 (or alternatively directly to the loyalty program30), where she indicates that she would like to use her loyalty pointsthat are available in her loyalty account (step 252). The loyalty systemmiddleware 40 reports to the participant 1 how much the availableloyalty points are worth (step 253). The participant 1 indicates howmany of the loyalty points (converted to currency) should be loaded intoan account (e.g., financial transaction account) (step 254). In anexemplary embodiment, a secondary transaction number (generated by a STNtransaction service 90) may be associated either with the participant 1loyalty account alone or in combination with an existing participant'sfinancial transaction account. Use of the loyalty account may be limitedby the participant 1 or by the account manager 10, or could be furtherlimited by the loyalty system middleware rules of use that may have beenpredefined by participating merchants 5 (step 255). Once the loyaltysystem middleware 40 has approved the request and allocated therequested loyalty points, the STN system 90 associates a STN andestablishes an account profile that includes both the loyalty accountand the secondary transaction account information (step 256) Thisinformation may be maintained on inter alia, a loyalty account database,transaction card database, or transaction log database. The STN system90 returns the STN (and other account information) to the loyalty systemmiddleware 40 to provide to the participant 1 for use in completingtransactions (e.g., online purchases) (step 257).

When desiring to purchase products using the loyalty point-funded STN,the participant 1 proceeds to a merchant 5 site (e.g., online website),selects goods and is requested by the merchant 5 to provide paymentinformation (e.g., via an online payment page such as shown in FIG. 8).The participant 1 chooses the appropriate card type or account manager(e.g., American Express, Visa, etc.) and enters the STN (and othernecessary delivery and payment information) into the appropriate webpage fields (step 258). The merchant 5 processes the STN authorizationwhere the account manager CAS 50 recognizes the transaction as involvinga STN (step 259), and forwards the request to the STN system 90containing, infer aka, an application server and a STN database (step260). It should be appreciated that the profile information may bestored in a loyalty program database, STN database, or any othersuitable configurable data structure. The STN system 90 recognizes theaccount as a loyalty account, and verifies that optional conditions, ifany, are met. If the conditions are not met, an error is returned to CAS50 and then to the merchant 5 (step 261). If the conditions are met, thebalance available on the loyalty account is reduced by the purchaseamount, a record of the purchase is recorded on the loyalty accountprofile, and an approval code is returned to the authorization system(step 262) and then to the merchant (step 263). The approved purchase isfinalized by the merchant 5 with the STN transaction being submittedthrough the merchant's existing point of sale (POS) network forsettlement (step 264). The STN loyalty transaction is received by theaccount manager FINCAP 60 (step 265). The FINCAP 60 forwards theSTN-loyalty transaction to the appropriate AP 70 system (step 266). TheAP 70 system then pays the merchant 5 according to the appropriatesettlement terms and conditions (step 267). The FINCAP 10, havingidentified the transaction as involving a STN, sends the transactioninformation to the STN service 90 to identify the actual transactioncard account (step 268). The STN service 90 recognizes that the STN isassociated with a loyalty account, searches for the loyalty-STN profileand passes a credit request to the appropriate participant 1 loyaltyaccount to (i) reduce the available loyalty points (step 269), and (ii)build a credit against the actual transaction card account that willoffset the charged STN transaction (step 269 b). In the first instance(step 269), the STN system 90 passes a request to the loyalty systemmiddleware 40 to deduct the appropriate number of loyalty points. In thesecond instance (step 269 b), both the original transaction charge andthe loyalty credit are passed by to FINCAP 60 for normal billingprocessing. If the loyalty credit completely offsets the STN transactioncharge, a zero balance may result. If the loyalty credit is less thanthe STN transaction amount, a participant 1 billing statement will begenerated billing the participant 1 for the remaining amount.

In accordance with one embodiment, CAS 50 receives an authorizationrequest for an authorization of as purchase transaction, via participant1 at a second e-commerce website. The authorization request isassociated with an account code that is issued by a first e-commerce website for use on the second e-commerce website. In response to theauthorization request, CAS 50 issues a challenge and forwards thechallenge to participant 1. The challenge is passed to an intelligenttoken for processing and the intelligent token generates a response tothe challenge. CAS 50 receives and processes the response fromparticipant 1 and verifies the intelligent token. CAS 50 assemblescredentials for the authorization request (wherein the credentialsinclude at least one key) and provides the assembled credentials toparticipant 1.

When CAS 50 receives a second request including a portion of theassembled credentials from participant 1, the server validates theportion of the assembled credentials with the key that corresponds tothe assembled credentials. This provides participant 1 access topurchase the account code. If the portion of the assembled credentialsis not valid, then the request is declined. Otherwise, CAS 50 determinesif the account code is equal to one of a plurality of valid accountcodes. When the account code is equal to one of the plurality of validaccount codes, CAS 50 compares the purchase value to the monetary valuethat is associated with the account code to determine if the monetaryvalue exceeds the purchase value. If the account code is not equal toone of the plurality of valid account codes or when the monetary valuedoes not exceed the purchase value, the request is declined. When themonetary value exceeds the purchase value, CAS 50 sends a purchaseauthorization message authorizing the purchase transaction and subtractsthe purchase value from the monetary value associated with the accountcode in order to obtain an updated monetary value, which is associatedwith the account code.

In accordance with one embodiment, the card provider system receivesfrom a user via a second e-commerce website, an authorization requestfor an authorization of a purchase transaction. The authorizationrequest is associated with an account code, which is issued by a firste-commerce web site for use on the second e-commerce website. The CAS 50includes a database that is logically separated into a first subsection,a second subsection, a third subsection, and an object repository. Eachof the subsections may be logically separated via a firewall.

The first subsection contains a high-level key class of objects and afirst plurality of secondary classes of objects derived from thehigh-level key class of objects. Each of the first plurality ofsecondary classes of objects defines a business unit. The secondsubsection contains a high-level secondary class of objects and a secondplurality of secondary classes of objects that are derived from thehigh-level secondary class of objects. Each of the second plurality ofsecondary classes of objects defines one of a plurality of transactioncodes. The second plurality of secondary classes of objects inheritsattributes from the high-level key class of objects. The thirdsubsection contains a high-level intermediate class of objects and athird plurality of secondary classes of objects derived from thehigh-level intermediate class of objects. Each of the third plurality ofsecondary classes of objects may define a geographic region and abusiness sub-unit, for example. Each of the third plurality of secondaryclasses of objects inherits attributes from at least one of thehigh-level key class of Objects and the high-level secondary class ofobjects.

The object repository includes a plurality of reusable classes fromwhich the high-level key class of objects, the high-level intermediateclass of objects, and the high-level secondary class of objects arederived. Each of the second plurality of secondary classes of objects isassociated with one of the plurality of transaction codes.

The CAS 50 determines when the account code is equal to one of aplurality of valid account codes. When the account code is equal to oneof the plurality of valid account codes, the CAS 50 compares thepurchase value to the monetary value that is associated with the accountcode to determine if the monetary value exceeds the purchase value. Ifthe monetary value exceeds the purchase value, the CAS 50 sends apurchase authorization message authorizing the purchase transaction andsubtracts the purchase value from the monetary value that is associatedwith the account code.

Those of ordinary skill in the art will appreciate that theaforementioned embodiments may be implemented using any number ofcomputing hardware and software. For example, a component of back endprocessing 10 may process account codes, rather than CAS 50 to determinewhen an account code is equal to one of a plurality of valid accountcodes.

The embodiment depicted in FIG. 13 allows the participant 1 to spend theloyalty points in at least two ways. First, the loyalty points can bededucted at the time of the transaction processing (e.g., during theinitial request or during authorization); or second, the transaction maybe reflected on the participant's 1 billing statement along with anassociated credit that reflects the payment with loyalty points. Itshould also be appreciated, that a participant 1 may choose to useloyalty points on a transaction-by-transaction basis, and preferably, isable to combine variations of currency (e.g., credit, debit cards, etc.)and non-currency tender (loyalty points), as desired, to effectuate atransaction. Additionally, both currency and non-currency tender may beintegrated into a STN gift product (where a first party gifts to asecond party a STN that has some currency value derived from a loyaltyaccount), or a STN stored value card (where the stored value card may beloaded with loyalty point-funded credit and used as a regular chargecard).

Another STN embodiment is shown in FIG. 14. Here, the participant 1 isable to choose to use loyalty points when shopping at a merchant 5 sitethat supports the “pay with loyalty points” payment option. ReferencingFIG. 14, the participant 1 goes to a participating merchant's site(e.g., online website) to shop for goods or services. The participant 1selects merchandise and continues to a payment site, where the “pay withloyalty points” is one of the payment options (step 301). When theparticipant 1 selects this option, a secure connection is establishedwith the account manager 10 that authenticates both the participant 1and the merchant 5 (step 302). The account manager 10 may request theparticipant's username and password which is returned to the accountmanager 10 with the purchase amount (step 304). The user interface 20(e.g., web server) causes the participant 1 to be authenticated,collects the associated transaction card account information and invokesthe loyalty system middleware 40 (step 305). The loyalty systemmiddleware 40 uses this card account information to identify theparticipant's 1 loyalty account (step 306). If none of the registeredaccounts are related to a loyalty account, the participant 1 is not ableto use loyalty points to pay for her purchase and an error is returnedto the participant 1. After identifying the loyalty account, the loyaltypoints available are converted to the corresponding currency value andcompared to the purchase amount being requested. If the purchase amountis greater than the loyalty currency value, an error may be returned tothe participant 1, or alternatively, may prompt the participant 1 to paythe remaining balance with a financial transaction card (step 307). Inone embodiment, if the loyalty currency value is greater than thepurchase amount, all transaction card accounts participating in oraffiliated with the loyalty account are collected and returned to theparticipant (step 308). The participant 1 designates the financialtransaction account to be used to host all succeeding financialactivity, which is then returned to the account manager 10 (step 309).The account manager 10 then triggers the STN system 90 to establish aSTN that is associated with the selected loyalty account and aloyalty-STN profile is set-up (step 310). The STN system 90 returns theSTN to the user interface system 20 and then to the participant 1 (step311). The participant 1 cuts and pastes, drags and drops, or auto-fillsthe STN (and other payment and delivery information) into theappropriate merchant payment fields (step 312).

As previously described, the merchant 5 uses the existing authorizationnetwork to request authorization for the STN transaction (step 313). TheCAS 50 recognizes the transaction as one involving a STN and forwards tothe STN service 90 (step 314). The SRN service 90 identifies theassociated financial transaction account for the STN (step 315) and alsorecognizes the account as associated with a loyalty account. At thispoint, although the loyalty transactions would have been previouslyverified, in an exemplary embodiment, the loyalty account balance isagain checked to minimize possible fraud (e.g., fraud involving tworequests using the same loyalty points). The cash equivalent for theloyalty points is then retrieved from the loyalty system middleware 40and if the purchase amount is greater than the available amount, adenial may be returned to the authorization system and to the merchant 5(step 316). If the cash equivalent of the loyalty points exceeds thepurchase amount, the STN system records the purchase in the loyalty-STNprofile and returns the STN to the CAS 50 (step 317). The CAS 50 thencompletes the authorization for the financial transaction account (step318), and returns the results (e.g., approval code) to the merchant 5(step 319).

The approved transaction is finalized by the merchant 5 with the STNtransaction being submitted through the existing POS network forsettlement (step 320). As before, the transaction information isreceived by the FINCAP 60 (step 321) and then forwarded to theappropriate AP system 70 (step 322) for payment (step 323). Since thetransaction involves a STN, FINCAP 60 directs the transaction to the STNservice 90 to identify the associated transaction card account (step324). The STN service 90 identifies the financial transaction account(step 325) and also recognizes that the STN account is associated withloyalty points, whereupon the STN service 90 searches the loyalty-STNprofile for the associated purchase record (step 326). The STN system(i) passes a credit request to the loyalty system middleware 40 toreduce the loyalty points (step 326 a), and (ii) creates a creditagainst the billing transaction (step 326 b). In step 326 a, the STNservice 90 passes a request to the loyalty system middleware 40 todeduct the appropriate number of loyalty points. Here, it is notnecessary to return the AR transaction information to FINCAP 60 forforwarding to the AR system 80, but a reconciliation entry is created toreconcile the accounts receivable for FINCAP 60. In step 326 b, atransaction record is used to build a credit against a financialtransaction account that will offset the charge transaction. The STNsystem 90 forwards this credit to FINCAP 60. The original billtransaction is returned to the FINCAP 60 to appear on the participant's1 statement. The FINCAP 60 then forwards the charge transaction to theappropriate AR system for normal processing. The FINCAP 60 forwards thecredit issued by the loyalty system middleware 40 to the appropriate ARsystem 80 for normal billing processing. Accordingly, the participant 1will see on her statement a credit reflecting the currency value of theloyalty points used and a charge in the amount of the transaction.

As briefly described above, another embodiment of the present inventionuses a stored value card or a smart card where the loyalty points areconverted to a currency value and may either be posted to a stored valuecard account or downloaded to a smart card. In this embodiment, thestored value card functions as a debit card that that draws upon abalance maintained in the stored value card account. The stored valuecard functions as a debit card and is processed using existing bankingsystems where, upon use, the stored value card amount is debited by anappropriate amount. To reload or add currency value to the stored valueaccount, a participant associates a stored value account with hisloyalty account, and instructs the account manager to convert loyaltypoints to a currency value to be applied to the stored value cardaccount.

It should be understood, however, that the detailed description andspecific examples, indicating exemplary embodiments of the presentinvention, are given for purposes of illustration only and not aslimitations. Many changes and modifications within the scope of theinstant invention may be made without departing from the spirit thereof,and the invention includes all such modifications. Correspondingstructures, materials, acts, and equivalents of all elements in theclaims below are intended to include any structure, material, or actsfor performing the functions in combination with other claim elements asspecifically claimed. The scope of the invention should be determined bythe appended claims and their legal equivalents, rather than by theexamples given above.

1. A method comprising: identifying, by a computer for offsetting apreviously executed charge, a first transaction based on transactioninformation received via a fillable form, wherein said first transactionis said previously executed charge, and wherein said transactioninformation comprises a first merchant name, a transaction account type,and a transaction amount level; determining, by said computer, aconversion ratio based on a second merchant identifier and saidtransaction account type; applying, by said computer in real time, acurrency value as a credit for said first transaction to a financialaccount, wherein said loyalty points are converted to said currencyvalue based on said conversion ratio; and offsetting, by said computer,a previously executed charge with said currency value.
 2. The method ofclaim 1, further comprising receiving, by said computer and through awebpage, a selection to apply said loyalty points as said currency valueto said first transaction.
 3. The method of claim 1, wherein saidpreviously executed charge appears on a billing statement including aplurality of transactions of previously executed charges
 4. The methodof claim 1, wherein said offsetting is over a web interface and in realtime.
 5. The method of claim 1, further comprising: receiving, by saidcomputer, a payment authorization request related to an available creditfor a full purchase amount of a first transaction, wherein said paymentauthorization request includes a first merchant identifier associatedwith a first merchant; and approving, by said computer, said paymentauthorization request for any of said full purchase amount up to saidavailable credit associated with a transaction account code such thatsaid first transaction is completed.
 6. The method of claim 1, furthercomprising applying said currency value as a credit to at least one of afinancial transaction account of a third party, a stored value accountof a third party, an online digital wallet account of a third party, agift product and a secondary transaction number.
 7. The method of claim1, further comprising increasing, by said computer, a balance of saidloyalty points associated with a transaction account code to obtain anincreased balance of loyalty points, subsequent to approving a paymentauthorization request, and based upon loyalty program rules for earningloyalty points.
 8. The method of claim 1, further comprising providing,by said computer and over a web interface, said webpage disclosing saidfirst transaction and said purchase amount in a first section of saidwebpage, and a balance of loyalty points in a second section of saidwebpage.
 9. The method of claim 1, further comprising retrieving, bysaid computer, information from a loyalty program database, including anamount of at least a portion of said loyalty points accumulated.
 10. Themethod of claim 1, further comprising increasing, by said computer andin real time, available credit based upon said offset of said previouslyexecuted charge.
 11. The method of claim 1, wherein said financialaccount is stored on a second database system.
 12. The method of claim1, wherein an indicator of available credit is associated with saidfirst transaction and comprises said first merchant name.
 13. The methodof claim 1, further comprising: presenting, by said computer, a firstrequest to approve said conversion ratio subsequent to determining saidconversion ratio; receiving, by said computer, an indicator of at leastone of an approval and disapproval of said conversion ratio from saidparticipant; and submitting, by said computer, a revision to saidconversion ratio in response to said indicator being a disapproval ofsaid conversion ratio.
 14. The method of claim 13, further comprising:receiving a second request, by said computer over a web interface andbased on said approval of said conversion ratio, from said participantto convert said loyalty points already existing in said loyalty programdatabase to said currency value using said conversion ratio; andretrieving, by said computer in real time, said loyalty points from saidloyalty program database system, wherein said loyalty points includepoints from a second merchant associated with the second merchantidentifier, in response to receiving said second request.
 15. The methodof claim 1, further comprising: registering, at said computer, for theuse of a loyalty program, wherein said loyalty program comprises aloyalty program database system; establishing, by said computer, aloyalty account, wherein loyalty account information is stored withinsaid loyalty program database system; and authenticating, at saidcomputer, the use of said loyalty program.
 16. The method of claim 1,wherein said loyalty points are associated with a loyalty program whichis operated by a third party.
 17. The method of claim 1, wherein saidapplying said currency value as a credit for said first transactionoccurs in real time.
 18. A system comprising: a processor for offsettinga previously executed charge, a tangible, non-transitory memoryconfigured to communicate with said processor, the tangible,non-transitory memory having instructions stored thereon that, inresponse to execution by said processor, cause said processor to performoperations comprising: identifying, by said processor, a firsttransaction based on transaction information received via a finableform, wherein said first transaction is said previously executed charge,and wherein said transaction information comprises a first merchantname, a transaction account type, and a transaction amount level;determining, by said processor, a conversion ratio based on a secondmerchant identifier and said transaction account type; applying, by saidprocessor, a currency value as a credit for said first transaction to afinancial account, wherein said loyalty points are converted to saidcurrency value based on said conversion ratio; and offsetting, by saidprocessor, a previously executed charge with said currency value.
 19. Anarticle of manufacture including a non-transitory, tangible computerreadable storage medium having instructions stored thereon that, inresponse to execution by a computer for offsetting a previously executedcharge, cause said computer to perform operations comprising:identifying, by said computer, a first transaction based on transactioninformation received via a finable form, wherein said first transactionis said previously executed charge, and wherein said transactioninformation comprises a first merchant name, a transaction account type,and a transaction amount level; determining, by said computer, aconversion ratio based on a second merchant identifier and saidtransaction account type; applying, by said computer, a currency valueas a credit for said first transaction to a financial account, whereinsaid loyalty points are converted to said currency value based on saidconversion ratio; and offsetting, by said computer, a previouslyexecuted charge with said currency value.